The University of Michigan's mid-August reading of consumer sentiment ticked up 0.8% from July to 61.7. The gain followed the 8.5% increase in July and the level about matched Consensus expectations for a reading of 62.0. The latest level of sentiment was the highest since March.

During the last ten years there has been a 47% correlation between the level of sentiment and the three month change in real consumer spending.

The expectations component of overall sentiment led the August improvement with a 6.2% rise after the 8.7% increase during July. Expectations for business conditions during the next year rose again as did expectations for conditions during the next five years. They made up nearly all of a sharp July decline.The expected change in personal finances fell modestly after a strong July increase.

The current conditions index was weak and fell 5.2%. That reversed most of the improvement during July. The decline was due to a sharp decline in the index of whether now is a good time to buy large household goods. It reversed the strength in the July reading. The view of current personal finances also fell (-31.1% y/y) early this month.

The opinion of government policy, which apparently influences economic expectations, stabilized after a sharp decline in July. Only seven percent of respondents thought that a good job was being done.

The mean expected rate of inflation during the next twelve months fell further to 5.5%. During the next five years, however, the expected inflation rate rose to 3.8% .

The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver's USECON database, with details in the proprietary UMSCA database.

How Much Have U.S. House Prices Fallen? from the Federal Reserve Bank of St. Louis is available here.